The cut in benchmark refining margins has resulted in a steep cut in RPL���s refining margins, which has led to a 17-47 % cut in the company���s FY10-FY 11 estimated earnings. RPL���s target price has also been cut by 58% to Rs 59 per share. Merrill Lynch has cut Singapore complex refining margins for FY10-FY 1E by 23-41 % to $4.2-5 .4/bbl.

RPL���s complex refinery, which enables it to process heavier and cheaper crude, should help it to achieve $4.1-5 .5/bbl premium to Singapore margins. RPL���s new target price is now based on EV/EBITDA, as opposed to the discounted cash flow (DCF) method which was used earlier.

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